SoT #45 Jim Willie: The Petro-Dollar Won’t Collapse – It Will Vanish

You’ll know the dollar is about to die when rises, rises and rises some more, because it’s soon going to vanish…the dollar and Treasuries will suffer a vanishing act from global rejection because foreign nations are going to say we don’t want your stinking toilet paper called “Treasury Bills” – we want something better. – Jim Willie on Shadow of Truth

I have been following Jim Willie’s work since 2002 – back in the days when Jim would submit free article to Gold-Eagle.com. Although I can’t make the time to listen to every podcast he does, I have listened to many over the years and recently. I can honestly say that the podcast that the Shadow of Truth separated into two parts because of its length is the best audio footage of JW that I have ever heard.

Something happened around the middle of 2013…[back then] I noticed significant changes in the relationship between the U.S. Government and the Saudi royal regime…In 2013 I came and said, “the petro-dollar is going to be trashed and we are seeing indications of this right now in the middle of 2013 – look for a grand and ugly divorce between the U.S. and the Saudis. [ed. note: this forecast is proving to be true, as the Saudis are clearly shifting their allegiance to China and the BRICS].

My colleague Rory did very little editing – this is Jim Willie in his essence. Something wound-up JW the day we recorded this and we were not about to perform any editorial surgery on his oration nor were we going to interrupt him until he ran out of gas, which is why this podcast is in two segments.

Emmet Fox wrote “The Sermon On The Mount” – this podcast could be named Jim Willie’s “Economic And Geopolitical Teachings From Costa Rica:”

1. Can you explain to the simple minded the mechanism of how the redemption of Treasuries by other countries drives up the dollar giving it the illusion of health ? Or best looking horse at the glue factory.

2. With the recent drive by shootings on the metals thru the fraudulent CRIMEX paper shorts. Is there a possibility that some of the decline in price is coming from traders both in China and the US that have received recent margin calls with the recent trillion dollar meltdown in China and power plug pull / glitch on the NYSE ?

1) when a dollar-denominated derivatives trade is unwound,the party that has to pay out to the other side – who is “in the money” on the trade – has to go out and get dollars to pay to the receiver. So if a bank in Germany has to pay out a bank in Japan, the German bank goes out and exchanges euros for dollars to send to the Japanese banks. When this occurs in large size and large quantities of contracts, it has the effect of pushing the euro lower from sell supply and driving the dollar higher from buy demand. That make sense?

2) Anything is possible. I’m sure some of what you mentioned is going on but the bulk of the selling is bullion banks dumping paper gold. They do it right before Shanghai opens, like last night, to make it look like Chinese margin selling.

For a corrupt and criminal as we KNOW these guys to be, if we could see behind the scenes it would likely be 10x more corrupt and criminal i reality.

Usually when bubbles are about to burst, there’s big push to drive the bubble even higher so that insiders can distribute as much of their stock, currency etc to the dumb money chasing the moment. That’s why there’s usually a parabolic move in a market before it collapses.

Dave I red an article by Charles Hugh Smith regarding the fact that central banks (PPT) and their eqivalents could be stuck with overpriced equities when their actions backfire on them.
Charles wrote that “they buy up overvalued assets to keep a floor under the market and the intention is to sell these overvalued stocks back in to the market when the sentiment gets better”
But what happens if the sentiment doesn´t get any better and the PPT and others are stuck with more and more overvalued papers and no one wants to buy them?
These equities must be held on someones books and can´t be bought into infinity or can they?

Equities? At least those trade in the public market. The Pensions are going to get whalloped on their
private equity fund investments. That’s probably the biggest scam going. I know from friends who
work at pension mgmt companies that pensions are throwing money hand over fist at p/e firm investments.
It’s a big bubble no one talks about. It will HAMMER pensions. I can’t wait!!! I’m so sick of this shit.

I agree with you Wayne.
The problem I have listening to Jim is that he constantly screams when he talks.
You lose some of the important stuff hes telling because his hysteric screaming.
But maybee the screaming is his trademark.

Hey Dave, off topic but I was talking with a friend about the vaunted “cash on books” that companies claim, with the poster child probably being Apple. It got me thinking that this money offshore may not reflect reality and part of the deal to do business in china (where they benefit from the near slave labor rates) may be that you have to invest in China – ghost cities, ghost stocks, who knows. Any idea on the validity of my theory? We know here if it isn’t in your hands you may not have it tomorrow, I could see this being the same thing writ very large.

Sorry for the rant, but people are upset because Willie is yelling or has a filthy mouth. Are you freaking serious? Get a life! We have the largest fraud perpetrated on mankind and your feelings are hurt? WOW!

Dave, Loved it. Jim reminds me of a mechanic pal of mine, when he comes over all the gal’s go shopping… my mr’s won’t talk to me for 3 days after when I put Jim on..she says’ it sounds’ like a chainsaw going in the background..but it’s the truth! Anyway I don’t care
i’ll huddle at 1am with my earphones to get my jackass fix.

Great interview, lots of insight there. I don’t mind the yelling, sometimes I talk like that with my friends!

One thought I have is about the dollar devaluation and the new domestic sh!t dollar. I think Jim is a little too optimistic about how America is going to fare after the collapse, it’s like, oh we’ll just take over the abandoned factories and get some Chinese capital and rebuild the country. I don’t think so…

All the Peak Oilers were raving that global oil production peaked for about 10 years, but a few years ago started climbing again. Why was this? One factor only: US fracking. But it’s obvious that this was just another of Wall Street’s ponzi schemes. The oil frackers don’t actually make money, it’s simply another 0% derivative scam like the others, which means all the increase in oil production over the last few years was vacuous and phony. Likewise, any reduction in the US oil trade deficit was also vacuous and phony.

So the point is, when this blows up, that fracking oil production is going to tank big time and then domestic US production will also tank. With the new US sh!t dollar being only domestic, the US will have lost its privilege to import oil and domestic consumption will have to drop to at least half of current levels. Oil price will skyrocket in real terms (per hour of human labour, although most people won’t have jobs). The US cannot run on expensive oil, the whole country’s infrastructure is built around cheap plentiful oil. Also, the US will have lost the ability to import pretty much anything manufactured. So no more cheap electronic gizmos. Its only exports to pay for its imports will be food.

The US isn’t going to get a 50% devaluation, or 90%, and then everything will stabilize. It’s heading for hyperinflation because they have no gold or anything to back this new sh!t dollar, it’s all going to be hell here in North America.

One of the most hilarious things to me is Americans whacking other countries for being corrupt. Russia is a favorite target, but the US abuses virtually every non-Western country for “corruption.”

I’ve pointed out before that this is absurd. There is no more corrupt country in the world than the US. The bank bailouts were pure corruption, performed even though a supermajority of the population was against them, even though the banks had broken the law systematically, and even though the banks were bankrupt due to decisions they knew were corrupt, illegal, and (yes), stupid.

The US election system is flagrantly corrupt, with billions of dollars of direct and indirect donations from the rich. You buy supper with a candidate for thousands of dollars a plate. You buy White House access with much larger donations. Third party PACs spend hundreds of millions.

The bribery in the US is legal. Legal. That does not mean it is not bribery. That does not mean it is not corruption. This system was arranged by the monied classes to ensure that politicians owe them and do not harm them, and that they continue to pass laws and take actions which help them.

The regulatory class is completely owned. There is a revolving door between Wall Street and the Treasury and Federal Reserve, for example, and Wall Street pays far better. When senior officials leave, they get jobs from those whom they regulated, or give speeches for six figures a pop. Politicians are treated the same, receiving lobbying jobs worth six to seven figures, board positions, and so on.

This is all legal, but it is corruption.

Corruption is the inevitable consequence of concentrated wealth. It always occurs when you have great inequality, it cannot be avoided.

You want corruption back to reasonable levels?

You want it illegal again?
Take the oligarchs’ wealth away from them and break the great monopolistic and oligopolistic companies or bridle them with uncorrupted regulators who will crawl up their backside and tax the hell out of them.

Nothing else works (and the second solution works for a while). Nothing else has ever worked. Anyone who tells you otherwise is lying to you.

You want you country back, and your children and yourselves to have a future?

h/t jessecafe for quote:
“The wealthy, not only by private fraud but also by common laws, do every day pluck and snatch away from the people some part of their daily living. They invent and devise all means and crafts, first how to keep safely without fear of losing that which they have unjustly gathered together, and next how to hire and abuse the work and labor of the people for as little money and effort as possible.” Thomas More, Utopia, 1516

Well, Dante, you just gave great examples of mass-cognitive-dissonance. Most Americans are cowards in part because they worship the state in some subtle way, and cannot imagine a life without it. Case-in-point: “In God We Trust” on coins and greenbacks. Few question it, even though it literally means: “If you doubt the system, then you doubt God.”

Here here MP! Jim knows when to put emphasis on certain points. The audio was overclocked(distorted) somewhere on his end for sure, but audible and engaging wiith none of the spurious, annoying dropouts sometimes afflicting independent media and alternative radio.

In contrast to Jim’s other interview this week, with Rick Wiles @Trunews where he talks relatively softly and slowly, Jim on Shadowoftruth is encouraged to let the truth rip, holding back only to catch an occassional breath. Like stream of consciousness writing or the three of them brainstorming.
Really, some f word, arse and the d word would suit me and even then, the sanctimonious, self righteous scolds would not understand this noble, rewarding battle.

Another excellent podcast by you and Rory Dave. Jim is a little hot headed but sometimes that is what needed. His comments about a separate domestic dollar were very interesting as this would shift the dollar devaluation to the American public and away from foreign dollar holders. It would be the same as if Greece had re-introduced the Drachma.

I am guessing that existing cash would be honored at full face value and would be gradually phased out of circulation. Dollars held in bank accounts would be converted to the new dollars at the devaluation rate. Outstanding debts would also be converted to the new dollar. The problem is most people don’t have a lot of savings so the net affect would be to double their debts since wages would now be paid in new dollars at the same rate. The government will probably open up debtor prisons as an incentive not to default on outstanding loans.

Needless to say this won’t go over well with the public which could explain the Jade Helm exercise. Jade Helm is scheduled to be completed in September. I think that the reset will probably happen this fall while the training is still fresh.

The devaluation should result in a return to domestic manufacturing but this is not something that can be done over night. Overall, it will probably be a lot like living in the Dark Ages. A go along to get along attitude will be greatly encouraged by the authorities.

Good thoughts, Bill. I too agree with Jim’s thesis. The only minor disagreement I have is that I don’t think we’re going to have a “return to domestic manufacturing” as long as we’re stuck with a fiat-money system. The brand may be different, but the effects are the same…and the capital structures of the west are already decimated by current regimes as they are. For sure, recovery will not happen overnight even with an honest gold standard (or some other commodity the market chooses to be money), but the fact remains that manufacturing necessarily requires the postponing of consumption (savings)…something which fractional-reserve banking is directly opposed to. In fact, much of our manufacturing base in the U.S. is dependent on the prior savings of capital made during the post-war boom period….an era where the dollar was still backed by gold (albeit, only redeemable by foreign customers at the time). With the exception of Silicon Valley during the early 90s, we haven’t really seen a sustained buildup of manufacturing since Nixon closed the gold-window. Hence, the outsourcing and the importation of manufactured goods; investors closest to the printing press will rationally invest in places where the dollar will buy the most.

And to finally bury this myth of manufacturing-through-fiat, China’s own manufacturing base is collapsing as we speak despite the supposed advantages of an “export-driven economy”. Just goes to show that even if the U.S. no longer enjoyed reserve status, the over-extension of production-chains must start correcting from somewhere, and it will be SIMULTANEOUS. In fact, I’m convinced it’s already here, and long overdue.

Other than that, I can’t imagine the reset happening without a commensurate reset in the prices for gold and silver, so that’s the good news as far as debt-repayments go.